Forecasters predicted the winter of 2016 – 2017 would be 15% colder than the previous winter of 2015 – 2016. The reality is temperatures in the Lower 48 states averaged 43 degrees, 7 degrees higher than normal and 9 degrees higher than last year. During mid-to-late February, temperatures were 15 to 30 degrees warmer than usual, which limited natural gas demand for heating purposes.
50% of US households use natural gas for heating. Winter demand for natural gas supply is also attributed to natural gas fired electricity generation to power heaters.
The U.S Energy Information Administration (EIA) reports demand for natural gas falling across all sectors. Total US consumption of natural gas fell by 15% according to data from PointLogic. Power burn declined by 3%; industrial consumption declined by 4% and residential and commercial sector consumption declined a whopping 29%.
EIA’s report week ending February 22, 2017 indicated the Henry Hub spot price fell $0.39 from $2.92/MMBtu the previous Wednesday to $2.53/MMBtu a 13% decrease. This is the lowest Henry Hub price since – mid-November 2016 when prices dipped to $2.00/MMBtu because of mild weather and high storage stocks.
Natural gas is facing very difficult times,” said Al Levine, principal with Powerhouse LLC, a Washington DC-based energy and risk management firm. “The bottom line is if you don’t have the demand, you are not going to have the price.
Lower natural gas prices are a benefit to all consumers specifically the industrial, institutional and commercial sectors. The end of a mild winter is an excellent opportunity to consider locking in a lower firm fixed natural gas price for one or 2 years. You should contact a reputable natural gas supplier like Bollinger Energy Corporation to review pricing options and lock in savings. Bollinger Energy Corporation is a certified small business established in 1988 with headquarters in Baltimore, MD. Bollinger specializes in supplying natural gas and petroleum to industrial, institutional, commercial and government entities. In addition, they assist customers with procuring electricity supply contracts through their electricity supply consulting group.